End of Enron's Saga Brings Era to a Close

HOUSTON, Oct. 24 -- The sentencing Monday of former Enron Corp. chief executive Jeffrey K. Skilling ended the saga of the scandal-ridden Houston energy company and effectively closed the book on an era of high-profile corporate malfeasance.

But Enron remains that period's signature scandal. The company's December 2001 breakdown ushered in a wave of corporate collapses that roiled investor confidence and prompted the government to enlist a special band of prosecutors and FBI agents to mount the most complex business fraud investigation in history. Their pursuit of top Enron officials helped change the way corporate wrongdoing is prosecuted and spurred companies to more aggressively police themselves.

Hours after a judge sentenced Skilling to more than 24 years in prison, the leaders of the Enron Task Force announced that they would close up shop, saying their mission was mostly complete. But even as officials packed their files and prepared for other jobs in government and the private sector, there were fresh signals about the direction post-Enron corporate crime enforcement would take.

A new wave of investigations is targeting executive greed, insider trading and investment pools known as hedge funds. On Tuesday, the former finance chief of Comverse Technology Inc. pleaded guilty to covering up a scheme to trigger big paydays for employees by changing the grant dates on stock options. Meanwhile, federal prosecutors charged the former finance chief of Refco Inc. for his role in a $1 billion accounting scandal that hurled the commodities brokerage into bankruptcy proceedings.

"There is an awful lot to do in the world of corporate fraud," said Chip Burrus, assistant director in the FBI's criminal investigation division.

Policing corporate malfeasance after Enron, it seems, won't be slow -- only different. The task-force model, criticized by defense lawyers for its single-minded pursuit of Enron's top officials, is unlikely to be repeated anytime soon. But the governance changes wrought by the company's collapse mean that more chief executives are losing their jobs because of allegations of wrongdoing and that more businesses are paying for costly internal investigations to ferret out fraud on their own.

Over its life span, the Enron Task Force secured guilty pleas from more than 15 executives, including the leaders of three top Enron business units, its finance chief and its chief accounting officer. Their testimony helped win convictions in May against Skilling and company founder Kenneth L. Lay, who died weeks later, of leading an accounting fraud that cost investors and employees billions of dollars.

However, the group's record in trials against lower-level executives has been mixed, legal analysts said.

Last week, the U.S. Court of Appeals for the 5th Circuit rejected a task-force request to re-hear its appeal in a case against former Merrill Lynch & Co. officials convicted of engaging in a sham deal to help Enron meet earnings targets in late 1999. A three-judge panel last summer threw out the conspiracy charges against the Merrill bankers, ruling that they did not deprive the investment bank of their honest services. The government still has the option of asking the Supreme Court to consider the case. The Justice Department's fraud section will pick up any remaining cases from now on, officials said.

Separately, the prosecution of executives in Enron's highly touted Internet broadband unit produced mixed results. A jury acquitted one defendant, former accountant Michael Krautz, and failed to come to a unanimous decision against several others.

Washington defense lawyer Barry Pollack, who won an acquittal in a jury trial for Krautz this year, criticized the task force for using aggressive legal theories and said the group has "precious few convictions after trial to show for its efforts."